S&P 500's Projected EPS Growth In 2024: Why QQQ, QQQM Might Lead The Way
Portfolio Pulse from Surbhi Jain
The S&P 500 Index is projected to see a double-digit EPS growth in 2024, which could benefit ETFs like SPY, VOO, and IVV. However, QQQ and QQQM, which track the Nasdaq 100 Index, may outpace these due to their higher allocation in sectors expected to drive this growth, such as healthcare, communication services, and information technology. The QQQ and QQQM ETFs have around 69.95% allocation in these sectors, compared to SPY's 47.86%, indicating a potential for better performance in line with the S&P 500's EPS growth.
January 10, 2024 | 3:46 pm
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NEUTRAL IMPACT
IVV is set to gain from the S&P 500's EPS growth, but like SPY and VOO, its performance may be tempered by its sector allocations.
IVV's correlation with the S&P 500 means it will benefit from the index's EPS growth, but the ETF's sector allocation might not leverage the full growth potential.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
SPY, tracking the S&P 500, may see benefits from the projected EPS growth, but its lower allocation in high-growth sectors compared to QQQ and QQQM could limit its relative performance.
SPY is directly tied to the performance of the S&P 500, and while it stands to benefit from overall EPS growth, its sector allocation may not capture the full potential of the growth sectors as much as QQQ and QQQM.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
NEUTRAL IMPACT
VOO, similar to SPY, is expected to benefit from the S&P 500's EPS growth but may not capture the full growth potential due to its sector allocation.
VOO will likely see a positive impact from the S&P 500's EPS growth, but the impact may be moderate due to its less concentrated investment in the fastest-growing sectors.
CONFIDENCE 80
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
QQQ, with a significant allocation in sectors driving the S&P 500's EPS growth, is well-positioned to outperform S&P 500-focused ETFs like SPY, VOO, and IVV.
QQQ's substantial investment in healthcare, tech, and communication services, which are expected to drive EPS growth, positions it to potentially outpace other ETFs that track the S&P 500.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
QQQM, mirroring QQQ's strategy, is also likely to benefit from the projected EPS growth in the S&P 500 due to its high allocation in growth sectors.
Like QQQ, QQQM's focus on sectors anticipated to drive the S&P 500's EPS growth suggests a potential for outperformance compared to broader market ETFs.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
XLC may see a positive impact due to its focus on the communication services sector, which is one of the sectors expected to contribute to the S&P 500's EPS growth.
XLC's targeted investment in communication services positions it to benefit from growth in this sector, contributing to the overall EPS increase.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
XLK is expected to benefit from the S&P 500's EPS growth, particularly due to its investment in the information technology sector.
As XLK focuses on the technology sector, it is well-positioned to capitalize on the growth expected in this area, which is a significant contributor to the S&P 500's EPS growth.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60
POSITIVE IMPACT
XLV could see an uptick due to its exposure to the healthcare sector, which is forecasted to be a key driver of the S&P 500's EPS growth.
With its focus on the healthcare sector, XLV is in a position to benefit from the sector's expected contribution to the S&P 500's EPS growth.
CONFIDENCE 75
IMPORTANCE 70
RELEVANCE 60